House calls

Halifax Building Society noted national average house prices were down 0.5% in October 2008. In spread betting conditions, house price bets are a peculiarity. Having a bet on equities or commodity prices can reach quick and lucid results, because prices are impulsive but house prices vary slowly, taking months for trends to become apparent. Most spread betters need a particular confidence to play the market.

House price spread betting is comparatively clear cut. According to HBOS, the typical price of a London house was £320,847 at the end of September 2008 and the average price of a house in the UK was £198,898.

It is therefore safe to predict that London house prices for March 2009 will be above £315,000 or below £311,000. So if you bet £1,000 a point that the average price, calculated by HBOS, would exceed £315,000 and the average London house price became £325,000 next March, you would make £10,000.

This can be a way of safeguarding yourself against price increases that surpass general probabilities. In addition, gambling on a drop below £311,000 can offer protection against larger price falls whilst you are selling a home. What is equally significant is that investors who bet on house prices are on average expecting London prices to drop by 3 per cent over the next six months. According to a Halifax monthly survey, which provides a single national average figure, without regional break-downs, implies this may be correct.